Key Points
- Cryptocurrencies continue to experience losses, with the market cap dropping by $150B in three days.
- Bernstein analysts predict a potential bullish run for Bitcoin despite the current weak market sentiment.
The cryptocurrency market has started the new week with an extension of its weekend losses. The market cap fell from $3.3T to $3.15T, wiping $150B off the market in just three days.
Major Cryptocurrencies Take a Hit
In this period, Solana[SOL] experienced the most significant drop, losing 15% of its value and dropping below $170. XRP also saw a decrease, with an 8% decline, though it remained above $2.5. Conversely, Bitcoin [BTC] and Ethereum [ETH] showed resilience, with decreases of less than 3% and 2% respectively, indicating robust performance amidst market volatility.
The crypto market’s negative sentiment has been exacerbated by the LIBRA meme-coin ‘scam’. QCP Capital, a crypto options trading desk, noted that BTC dominance has risen to around 60%, a four-year high, as Ethereum and other altcoins continue to underperform. The LIBRA scandal involving Argentinian President Javier Milei has further dampened sentiment around altcoins and memecoins.
Fed’s Hawkish Stance Caps BTC’s Upside
Bitcoin’s upward trend has been limited due to the Federal Reserve’s hawkish pause on interest rates in January. Fed governor Patrick Harker has maintained this stance, advocating for steady interest rates until inflation moderates. This bearish pressure has kept Bitcoin below $100K for nearly two weeks, and the rise of BTC Dominance (BTC.D) above 60% has further hindered altcoin rebound.
Despite the current market sentiment, Bernstein analysts led by Gautam Chhugani have made a bullish prediction for Bitcoin in the medium term. They believe the Crypto Task Force, led by David Sacks, is working towards establishing a National Bitcoin reserve. They also suggested that the US Sovereign Wealth Fund (SWF) could include Bitcoin and other cryptocurrencies as reserve assets.
